Pacific Islands: Labuan

CORPORATE FEATURES

GENERAL
Type of Company
Non-resident
Political Stability
Good
Common or Civil Law
Common
Disclosure of Beneficial Owner
No
Migration of Domicile Permitted
Yes
Tax on Offshore Profits
None
Language of Name
Latin Alphabet
CORPORATE REQUIREMENTS
Minimum Number of Shareholders
One
Minimum Number of Directors
One
Bearer Shares Allowed
Yes
Corporate Directors Permitted
Yes
Company Secretary Required
Yes
Standard Authorised Share Capital
US$ 50,000
LOCAL REQUIREMENTS
Registered Office/Agent
Yes
Company Secretary
No
Local Directors
No
Local Meetings
No
Government Register of Directors
Optional
Government Register of Shareholders
No
ANNUAL REQUIREMENTS
Annual Return
No
Submit Accounts
No
RECURRING GOVERNMENT COSTS
Minimum Annual Tax/Licence Fee
US$ 450
Annual Return Filing Fee
N/A

GENERAL INFORMATION:

Located nearly midway between Indonesia and Hawaii, the Marshall Islands are the eastern-most island group in Micronesia. The Marshall Islands cover approximately 2 million sq. km in the Central Pacific Ocean, with two 1,280 km long parallel chains of atolls and volcanic islands separated by 179 km of sea. The Islands feature sandy beaches ringed by coconut laden palm trees, and surrounded by crystal-clear lagoons teeming with tropical fish, giant turtles and colourful coral.

POPULATION

The islands have a population of just over 43,000 most of whom live in the capital Majuro.

POLITICAL STRUCTURE

The islands were settled some 4,000 years ago. In the 16th century, the Spanish were the first in a long series of visitors. Later, Russian navigators visited the Islands more extensively. It was not until the 18th century that British naval officer John Marshall rediscovered and gave his name to the Islands.

Germany annexed the Marshall Islands in 1885. After World War I, under a League of Nations mandate, the Japanese administered the Islands. After the Second World War, the Marshall Islands became a United Nations Trust Territory of the Pacific Islands under United States administration. The Republic of the Marshall Islands gained independence in 1986, becoming a full member of the United Nations in 1991.

The Marshall Islands Constitution, signed in 1979, is a blend of American and British models of government. Under the parliamentary system, the legislature, known as the Nitijela, elects a President from among its members. In turn, the President nominates a Cabinet of six to ten members.

The legal system is administered by courts whose judges are appointed by the Cabinet. The court system consists of local courts of first instance, a Traditional Rights Court with jurisdiction over real property matters and a High Court with maritime jurisdiction. Appeals may be brought before the Supreme Court in all cases.

INFRASTRUCTURE AND ECONOMY

The infrastructure in the Marshall Islands is more sophisticated than most other nations in the region. The two islands with most of the population, Majuro and Ebeye both have reliable power plants and public water systems. There are two international airports and 26 airstrips scattered throughout the larger islands. There are also 12 deep water docks for large ocean going ships.

Excellent international communications on Majuro and Ebeye are provided by satellite links for telephone, fax and telex. Presently, there are two major Pacific region banks, as well as the Bank of the Marshall Islands - all on Majuro.

An important industry is large-scale commercial fishing. Japanese fishermen, who are licensed to fish Marshallese waters, haul in roughly 42 million pounds of tuna and billfish each year. The export of coconuts (copra) is another important economic factor.

The Marshall Islands has a rapidly growing ship registry, increasing by over 50% between 1994 and 1995. Vessel types include oil tankers, bulk carriers, container ships and fishing vessels.

The Marshall Islands only recently began to be viewed as a tourist destination. For environmental reasons, controlled tourism is the watch-word, whether on Majuro or on the outer atolls, the lagoons and the ocean offer snorkelling, scuba diving, sport-fishing and sailing.

LANGUAGE

Languages spoken are Marshallese and English.

CURRENCY

US Dollar.

EXCHANGE CONTROL

None.

TYPE OF LAW

Common Law based on Anglo/American Common Law.

PRINCIPAL CORPORATE LEGISLATION

The Associations Law of the Republic of the Marshall Islands 1990, which incorporates the Business Corporation Act (BCA) and the Partnership Act.

COMPANY INFORMATION:

TYPE OF COMPANY FOR INTERNATIONAL TRADE AND INVESTMENT
Non-Resident Domestic Corporation

Non-Resident Domestic Corporations are easy to form and administer. Although the Marshall Islands BCA is modelled after the corporate laws of the United States, certain provisions have also been borrowed from British law. These allow, if desired, the adoption of a Managing Director and a Corporate Secretary as officers of the corporation instead of the customary, US-style, President, Treasurer and Secretary. The corporation's executive office, where its records are kept, may be located in any country. Facsimile filings are allowed in the Marshall Islands and corporations are never required to have corporate documents acknowledged by a consular official.

PROCEDURE TO INCORPORATE
The Republic of the Marshall Islands has an exclusive franchise with one company, which is licensed to incorporate all non-resident companies. After receipt of name approval, companies can be incorporated using standard Articles of Incorporation. With standard Articles, the request to incorporate should contain the following information:
  • Corporate Name
  • Number of authorised shares
  • Whether shares have par or no par value (if par value, amount per share)
  • Whether the shares are to be in bearer and/or registered form
  • If clients own Articles of Incorporation are to be used, these must be prepared in accordance with the Marshall Islands BCA
RESTRICTIONS ON TRADING
Cannot trade within the Marshall Islands. Cannot undertake the business of banking, trust services, insurance, assurance or reinsurance.

strong class="ColorText2">POWERS OF COMPANY
A Company incorporated in the Marshall Islands has the same powers as a natural person.

LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
English.

SHELF COMPANIES AVAILABLE
Yes.

REGISTERED OFFICE REQUIRED
Yes, must be maintained in the Marshall Islands at the address of the licensed Trust and Management Company.

TIME TO INCORPORATE
One day, but a further two days is required for delivery of documentation from the registry.

NAME RESTRICTIONS
Cannot be identical or similar to an existing company. The following words or their derivatives may not be used: bank, chartered, establishment, foundation, insurance, partnership or trust.

LANGUAGE OF NAME
Can be in any language as long as Roman letters are used. The Registrar may however require an English translation if a foreign language is used to ensure that the proposed name is not a restricted name.

SUFFIXES TO DENOTE LIMITED LIABILITY
Any standard corporate suffix or its abbreviation, for example: Corporation, Incorporated, Limited, Gesellschaft mit beshr�nkter Haftung, Aktiengesellschaft, Soci�t� Anonyme, Sociedad An�nima.

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
No.

COMPLIANCE:

AUTHORISED AND ISSUED SHARE CAPITAL
The standard authorised share capital is 500 shares without par value or a capital with a stated par value up to US$ 50,000. The authorised share capital may be expressed in any currency. The minimum issued share capital is either one share of no par value or one share of par value.

CLASSES OF SHARE PERMITTED
Marshall Islands' corporations may have registered shares, bearer shares, preference shares, redeemable shares, shares with or without par value and shares with or without voting rights.

BEARER SHARES PERMITTED
Yes.

TAXATION
The Marshall Islands statutorily exempts non-resident companies from taxes.

DOUBLE TAXATION AGREEMENTS
None.

LICENCE FEES
Annual maintenance fee of US$ 450.

FINANCIAL STATEMENT REQUIREMENTS
There is no requirement to file financial statements, but records should be maintained to reflect a company's financial status.

DIRECTORS
The minimum number of directors is one. The directors may be natural persons or bodies corporate. They can be of any nationality and need not be Marshall Islands residents.

COMPANY SECRETARY
A Marshall Islands corporation must appoint a company secretary who may be a natural person or a body corporate. The company secretary can be of any nationality and need not be resident in the Marshall Islands.

SHAREHOLDERS
The minimum number of shareholders is one.